Commercial asset marketplace RB Global (NYSE: RBA) reported Q1 CY2025 results topping the market’s revenue expectations, with sales up 4.1% year on year to $1.11 billion. Its non-GAAP profit of $0.89 per share was 9.1% above analysts’ consensus estimates.
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RB Global (RBA) Q1 CY2025 Highlights:
- Revenue: $1.11 billion vs analyst estimates of $1.04 billion (4.1% year-on-year growth, 6.9% beat)
- Adjusted EPS: $0.89 vs analyst estimates of $0.82 (9.1% beat)
- Adjusted EBITDA: $327.9 million vs analyst estimates of $307.4 million (29.6% margin, 6.7% beat)
- EBITDA guidance for the full year is $1.35 billion at the midpoint, above analyst estimates of $1.34 billion
- Operating Margin: 17.1%, down from 18.7% in the same quarter last year
- Free Cash Flow Margin: 9.2%, up from 5.5% in the same quarter last year
- Market Capitalization: $18.86 billion
Company Overview
Born from the 1958 founding of Ritchie Bros. Auctioneers and rebranded in 2023, RB Global (NYSE: RBA) operates global marketplaces that connect buyers and sellers of commercial assets, vehicles, and equipment across multiple industries.
Sales Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
With $4.33 billion in revenue over the past 12 months, RB Global is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.
As you can see below, RB Global’s 27.4% annualized revenue growth over the last five years was incredible. This is a great starting point for our analysis because it shows RB Global’s demand was higher than many business services companies.
Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. RB Global’s annualized revenue growth of 52.9% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
This quarter, RB Global reported modest year-on-year revenue growth of 4.1% but beat Wall Street’s estimates by 6.9%.
Looking ahead, sell-side analysts expect revenue to grow 1.8% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will see some demand headwinds. At least the company is tracking well in other measures of financial health.
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Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
RB Global has been an efficient company over the last five years. It was one of the more profitable businesses in the business services sector, boasting an average operating margin of 17.6%.
Looking at the trend in its profitability, RB Global’s operating margin decreased by 1.7 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
This quarter, RB Global generated an operating profit margin of 17.1%, down 1.6 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
RB Global’s EPS grew at an astounding 19.7% compounded annual growth rate over the last five years. However, this performance was lower than its 27.4% annualized revenue growth, telling us the company became less profitable on a per-share basis as it expanded.
We can take a deeper look into RB Global’s earnings to better understand the drivers of its performance. As we mentioned earlier, RB Global’s operating margin declined by 1.7 percentage points over the last five years. Its share count also grew by 68.7%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders. 
In Q1, RB Global reported EPS at $0.89, in line with the same quarter last year. This print beat analysts’ estimates by 9.1%. Over the next 12 months, Wall Street expects RB Global’s full-year EPS of $3.49 to grow 8%.
Key Takeaways from RB Global’s Q1 Results
We were impressed by how significantly RB Global blew past analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock remained flat at $102.27 immediately following the results.
Is RB Global an attractive investment opportunity at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
